UPDATE: BRF may take LSU, Gov. Edwards to court

Louisiana Gov. John Bel Edwards met with northern Louisiana legislators in Monroe Wednesday to discuss whether or not he will seek to replace BRF as the operator of the state's safety net hospitals in Monroe and Shreveport.
Greg Hilburn/USA Today Network

Gov. John Bel Edwards and LSU have taken the first step in removing BRF as the operator of the state's safety net hospitals in Monroe and Shreveport, but BRF said Tuesday it will resist removal and take LSU and the state to court if necessary.

Edwards and LSU issued separate breach of contract notices to BRF late Monday night, with Edwards saying the partner "has failed to achieve a public purpose as required by state law."

The termination notice comes only days after the governor said he was hopeful BRF could partner with Ochsner Health System of New Orleans to bridge the shaky relationship among BRF, the state and LSU, which operates its med school within University Health hospitals.

BRF, which is headquartered in Shreveport, operates University Health in Shreveport and University Health Conway in Monroe.

"This notice to BRF does not change the state's commitment to resolve this issue as quickly as possible," Edwards' spokesman Richard Carbo said in a statement to USA Today Network. "Gov. Edwards is committed to protecting medical education and providing for quality medical care in North Louisiana, and we are hopeful that BRF will work to resolve the issues in the notice of breach.

"This notice requires that the problems outlined be addressed in the next 45 days, and we will continue those discussions," Carbo said.

University Health Chairman Steve Skrivanos disputed all of the state's and LSU's claims that BRF has "failed to achieve its public purpose.

“While we are very disappointed in the actions of LSU and the Division of Administration, we remain committed to try to work with them to resolve our differences for the benefit of the people of North Louisiana,” said Steve Skrivanos, chair of University Health. “We will resist any effort to interfere with our successful effort to improve patient care and access for the residents of North Louisiana,” said Skrivanos.

Skrivanos contends the deal offered by the state is unfair, saying the northern Louisiana hospitals receive just 32 cents per patient for every $1 received by the New Orleans safety net hospital, something the state denies.

He also pushed back on the state's and LSU's demands that BRF increase its funding for LSU, citing "net reductions and funding from the state that have cost the hospitals tens of millions of dollars annually."

“Given these enormous cuts, we are not going to prioritize paying LSU ahead of the needs of our patients. And we are not going to pay LSU for services that they cannot document or that are based on faulty invoices and cannot be supported as reflecting true fair market value,” said Skrivanos.

Edwards met with about 15 northern Louisiana lawmakers in Monroe last week in the CenturyLink boardroom to update them on negotiations with BRF and the possibility of Ochsner stepping into the mix.

Ochsner Health is a large and well-regarded hospital company based in New Orleans.

"We did have preliminary high-level discussions with Ochsner about how we can better collectively advance health care, medical education and research for the entire northern Louisiana community," Skrivanos said then.

Ochsner's top executive said he looks "forward to further discussions."

"In our effort to continually advance wellness and health, Ochsner regularly evaluates partnerships and collaborations in order to improve patient outcomes, lower costs for patients and provide better access to healthcare within our community," Ochsner president and chief executive Warner Thomas said in a statement.

LSU, which operates the medical school in Shreveport within the University Health hospital, and BRF have been at odds since BRF took over the hospitals in 2013 after then Gov. Bobby Jindal privatized the charity hospital system.

LSU tried to oust BRF in 2015, but a judge ruled in favor of the hospitals' operator.

Edwards said he believes a partner like Ochsner could strengthen BRF's financial position, which is a concern of the state, and could be a stabilizing influence between BRF and LSU.

Lawmakers from Monroe and Shreveport were optimistic following their meeting with the governor.

"I think it's a good opportunity for both the state and BRF," Sen. Francis Thompson, D-Delhi, dean of the delegation, said of the potential partnership with Ochsner.

"At the end of the day, we have to find someone like Ochsner who could work with the LSU medical school and has deeper pockets to help BRF," he said. "Whatever we do, we must stand up for both hospitals and the medical school."

Thompson has been a consistent advocate for BRF.

"I think the governor is on the right track," said Sen. Barrow Peacock, R-Bossier City. "A commitment that allows the hospitals and the medical school to reach their potential requires at least one additional partner. I think we'll have a resolution between now and the end of the year."

BRF had sought an alliance with Ochsner more than two years ago, but it accused Willlis Knighton Health System, northwestern Louisiana's dominant health care provider, of torpedoing that effort.

BRF, which has filed an antitrust lawsuit against Willis Knighton, has claimed Willis Knighton and LSU have worked together to undermine BRF from the start.

A hearing in the antitrust lawsuit is scheduled Friday in Shreveport.

Jay Dardenne, Edwards' commissioner of administration, has denied that Willis Knighton tried to influence the state in it dealings with BRF.

Edwards issued a breach notice to BRF last fall before the two sides reached an agreement after weeks of tense negotiations.

Greg Hilburn covers state politics for the USA TODAY Network of Louisiana. Follow him on Twitter @GregHilburn1